Correlation Between UE Furniture and Chongqing Changan
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By analyzing existing cross correlation between UE Furniture Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on UE Furniture and Chongqing Changan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UE Furniture with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and Chongqing Changan.
Diversification Opportunities for UE Furniture and Chongqing Changan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 603600 and Chongqing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding UE Furniture Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and UE Furniture is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UE Furniture Co are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of UE Furniture i.e., UE Furniture and Chongqing Changan go up and down completely randomly.
Pair Corralation between UE Furniture and Chongqing Changan
Assuming the 90 days trading horizon UE Furniture Co is expected to generate 0.86 times more return on investment than Chongqing Changan. However, UE Furniture Co is 1.16 times less risky than Chongqing Changan. It trades about 0.03 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.02 per unit of risk. If you would invest 1,022 in UE Furniture Co on September 4, 2024 and sell it today you would earn a total of 180.00 from holding UE Furniture Co or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UE Furniture Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| UE Furniture |
| Chongqing Changan |
UE Furniture and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and Chongqing Changan
The main advantage of trading using opposite UE Furniture and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE Furniture position performs unexpectedly, Chongqing Changan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| UE Furniture vs. Nanjing Putian Telecommunications | UE Furniture vs. Kangyue Technology Co | UE Furniture vs. Shenzhen Hifuture Electric | UE Furniture vs. Tianjin Realty Development |
| Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank | Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Bank of China |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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